5-O goes back even further than California late 80's. It's origins are a reference to an old 70's TV show called Hawaii 5-0 starring Jack Lord. The police were 5-O and eventually the show lingo caught on as hip among petty criminals in southern California.

"STOP, Hawaii 5-O!!!!"

....blah, blah, blah- small struggles, throw a few punches - handcuffs criminal and stuffs them in the back of a patrol car ....

5-0 became a slang term for law enforcement (aka police) after the hit show "Hawaii Five-O". The show was centered around a fictional division inside the State-Police of Hawaii and carried the same name as the television show ("Hawaii Five-0". The division's name gets its origin from honoring the fact that Hawaii was the 50th state to become apart of the United States of America.
On a side note, the division was actually called "Hawaii Five-0" (as in Zero, no the letter "o") but IMDB has the show listed with the letter "o" in the tittle.